Sophea Chum

Thank you for your loan. It has been disbursed to Sophea Chum by MAXIMA Mikroheranhvatho Co., Ltd. in Cambodia. We are excited to watch this business grow. Over the next 16 months, MAXIMA Mikroheranhvatho Co., Ltd. will be collecting repayments from this entrepreneur and posting progress updates on the Kiva website.

As a Kiva Fellow, I had the privilege of visiting Sophea Chum in late January with Sothea San, a client officer for Kiva partner microfinance institution Maxima. Sophea lives on Koh Dach, an island in the Mekong River that is only accessible by ferry, about 15 kilometers north of Phnom Penh. When we stopped at her house, Sophea and her husband Mab welcomed us in for a short chat about their weaving business and her Kiva-funded loan.

This $600 loan is Sophea's first one from Maxima; she said she used about $430 of the money to buy silk and cotton with which to weave, and spent the remaining $170 to fix the stairs at her house. There are two looms at Sophea's house that sit side-by-side in the open-air ground floor area that sits underneath their living quarters. Sophea and her husband both weave, and when I visited their looms were fitted with a brilliant pink thread which stained Sophea and Mab's fingers as they worked.

Sophea said she learned how to weave from her sister, aunt, and neighbors. The island where she lives is home to thousands of weavers, many of whom specialize in making silk and silk-blend fabrics with traditional Cambodian patterns. Recently, hard times have befallen many weavers. The price they're paid for their fabric has dropped, but the cost of raw materials such as silk has stayed about the same. Sophea said that when she took out her loan from Maxima, she was able to sell one kben (a one-meter by four-meter piece of hand-woven fabric) for about $9; prices have dropped by almost 20 percent, and now the same piece of fabric only fetches $7.50. She said profit from one kben has fallen below $3, and it takes more than a day to make one kben.

Sophea said she and her husband weave at about the same rate, and between them produce 40 kben a month. This gives them a net income of only $120, which worries her. Sophea said that she's considered trying to find work in a garment factory, but said many have been closing. In Cambodia, garment work is a rare industry with a guaranteed minimum monthly wage; monthly salaries start at $50, and many work overtime in order to take home $80 instead. With over $2 billion in production, garment manufacturing is one of Cambodia's biggest industries, and it accounts for 80 percent of the country's export earnings.

Even if Sophea were to abandon weaving for a garment factory, she would have to work overtime just to match her income from weaving. Sophea says she likes weaving, and hopes to continue being able to do it. Being able to work at home also makes taking care of her four-year-old daughter easier.

Sophea's loan from Maxima allows for up to three months' grace period, where clients are allowed to pay interest-only and skip principal payments. Sophea said she's already used all of the grace period permitted, and hopes she'll be able to make payments on upcoming loan installments.

Pictured in the photo that accompanies this journal update: Sophea sitting at her loom in her house.

About Maxima:

Maxima Mikroheranhvatho Co. Ltd. was founded in March 2000 by a group of friends with the objective of providing financial services to low income clients through small loans to individuals, groups and small to medium-sized enterprises (SMEs).

Maxima aims to contribute to the economic and social progress of rural Cambodia by making credit available to those who lack access to loans from traditional commercial banks. Maxima has been a Kiva partner since May 2007, and since then Kiva lenders have helped Maxima fund more than 1000 loans.

To see if Maxima has loans in need of funding by Kiva lenders, click here. Or consider joining the Maxima fan club -- aka the Maxima lending team -- on Kiva!

Dear Lender,

Happy Year of the Ox! Thank you for supporting a Kiva entrepreneur in Cambodia.

It is the first day back in the Maxima office after Khmer New Year, and the office is abuzz with discussions of people describing their vacations. Our Kiva Coordinator, Sophal, a bright, 22-year-old Khmer girl and one of my closest friends in the office, asks me where I went.

“Battambong,” I reply, trying to pronounce the name correctly. After a few feeble attempts, Sophal at last can understand the city I mean.

“Did you dance, Julie?” She asks.

“Yes! We danced at the pagoda all three nights!” I exclaim.

“S’bai, at? Was it happy?”

“S’bai s’bai! Very happy!”

My name is Julie Picquet, and I am a Kiva Fellow working with Maxima Mikroheranhvatho, a Kiva Field Partner based in Phnom Penh, Cambodia. With two-thirds of my fellowship complete, I can hardly believe that I have less than one month left with this beautiful country and its inspiring citizens.

Kiva’s Partnership with Maxima

As a Kiva Fellow, I was placed with one of Kiva’s Field Partners to provide support and transparency into the money lending process. In the past nine weeks, I have visited Kiva entrepreneurs and worked closely with Maxima staff to write borrower updates, streamline our upload processes, and help with translation. As you may know, all entrepreneurs on Kiva’s web site are supported by local Field Partners, or microfinance institutions (MFIs) like Maxima, who are Kiva’s liaison between Kiva lenders and Kiva borrowers. They choose which of their clients are eligible to receive Kiva support, write and upload business profiles, disburse loans, collect payments, write journal updates, and respond to lender comments. Currently, Maxima is the only Field Partner to be completely owned and operated by Cambodians.

Despite the prominence of microfinance institutions in Cambodia (more than eighteen major banks and counting), Maxima stands apart from the rest as a boutique firm. As the smallest of Kiva’s four field partners in Cambodia, Maxima has the flexibility to tailor its loan products to best fit client demands. For example, some loan products include flexible interest rates, allowing clients to choose a lower interest rate if they can come to the Maxima office to make their payments, rather than have the loan officer drive to the clients’ residences. This cuts down on significant costs for the MFI, who can in turn pass the savings on to the client.

Riding on the back of a Maxima motorbike, interviewing borrowers and hearing about their business operations, I am impressed by the enthusiasm villages show when a loan officer and I drive past their houses. Sothea, a loan officer whose territory is the Koh Dach Island on the Mekong river, where she was raised and her parents still live, teaches me about customer service. “I always smile, the whole time I’m here,” she says, “My clients are everywhere, I want them to see me happy!”

Client Profile: The Um Family’s Mushrooms

Maxima’s clients seem happy, indeed. In the past nine years, Maxima has disbursed over $6 million dollars of loans and reached over 10,000 families. Maxima gives not only business loans, but also loans to build houses or to send children to school. In the homes I visit, I see the signs of development – children’s homework on the bamboo bed, taxi driving certificates pinned to the wall of a humble, wooden house. Piece by piece, Maxima’s loans help Cambodians improve their standard of living through sustainable business growth.

One example of this forward movement through small business entrepreneurship is exemplified through Sotheany Um and her family. When a credit offer and I approached the Um household, Sotheany’s father proudly told me that he could speak some French (which he learned when Cambodia was a French colony), so I said “Je m'appelle Julie.” He laughed and pulled up some chairs for Sothea and I to sit, while his daughter finished some work. During our interview, Sotheany’s young daughter ran around in pigtails and holding a balloon while we talked.

Sotheany is a hardworking businesswoman. This is her first microfinance loan, and she used all $700 of her loan to start up a mushroom business near the home she shares with her parents. She learned the mushroom growing trade from her brother-in-law, who had learned it from his uncle. She started the business about 6 months ago upon receiving the loan.

In this business, large, dark rooms are filled with vertical lines of segmented plastic bags, each filled with a mushroom fertilizer. The bags hang from floor-to-ceiling, and after a few weeks, wide, white mushrooms begin to sprout from the bottoms of each segment. The Ums built two buildings to grow mushrooms, each with over 5000 segmented bags. Sotheany’s father and brother-in-law enthusiastically showed us their mushroom huts and the mushrooms that are beginning to grow.

Sotheany sells her mushrooms on the island for 6000/kg for regular consumers, and 4000 or 5000/kg for wholesalers. One problem she faces is the lack of wholesalers to purchase her mushrooms. She may need to sell some of her mushrooms in Phnom Penh as well in order to increase her market. Sotheany is hopeful that she will be able to pay back her loan on time.

This video shows my interview with Sotheany, as well as her father and brother-in-law giving us a tour of the rooms where her mushrooms grow: http://www.youtube.com/watch?v=LoHT7jC5tUw

I was deeply impressed with the hard work that the Um household had put into starting this business. Mr. Um had even painted signs to mark the entrance of the mushroom hut, in both Khmer and French. To me, it showed the care that they have taken to run their business successfully and increase their income. On the Koh Dach Island, most people are weavers, and I imagine that it must take courage and confidence to introduce a new product to the island.

Before leaving to visit more weavers on the island, I thanked the Um family for their time and wished her success: “Some nang lo’ah!” – “Good luck!” To Sotheany’s father I said, “Au revoir!”

Maxima Welcomes the New Year

Last week Maxima brought in monks to bless the staff for Khmer New Year and invited me to join. Upstairs in our office, desks were pushed aside, mats were spread, and shoes were removed. We sat down and listened to the monks chant, as they splashed us with water and showered us with flower petals. The following day at 7:30 am, I was picked up by Maxima’s driver and brought to our Khmer New Year Party, where we met up with our second branch and the 60 or so employees cooked together, ate together and danced together as a family. “S’bai at, Julie?” They ask. “Yes,” I say, “I am very happy. Are you?”

Cambodia’s recent history paints a very different picture than the one I have come to see in my time here. Development is underway, and in the wake of a genocide, social problems and political corruption, in the faces of my coworkers and the people they serve I see happiness and determination.

On behalf of Kiva, Maxima and its hardworking clients, I thank you for your continued support of our hard work. Together, we can bring sustainable solutions to poverty and facilitate development worldwide.

We wish you a happy and healthy Year of the Ox, and we hope to continue to partner with you in the future.

Very Sincerely Yours,

Julie Picquet

Maxima Mikroheranhvatho

Phnom Penh, Cambodia